Lower than, we see a Bloomberg display screen demonstrating Colgate’s raw and you can modified beta

Lower than, we see a Bloomberg display screen demonstrating Colgate’s raw and you can modified beta

Bloomberg calculates beta by the taking a look at the last 5 years’ worthy of off Colgate’s inventory efficiency and you may measures up them to SP productivity to possess the same several months. Using beta while the an excellent predictor regarding Colgate’s coming sensitivity to market change, we possibly may expect Colgate’s share rates to increase by 0.632% getting a-1% boost in the brand new SP five-hundred.

Toward statisticians certainly one of your, observe Bloomberg also incorporates r squared and you may basic errors because of it matchmaking, which shows you how reliable beta is just as good predictor out of the near future relationship between your SP and Colgate’s productivity. Continue reading « Lower than, we see a Bloomberg display screen demonstrating Colgate’s raw and you can modified beta »